Along with our partners at Stratforma, Amadeus has been engaged in a scenario planning initiative in recent months, designed to assess how a changing world could impact global travel. While we see the travel sector recovering quickly, the shape of the industry, post-recovery, remains uncertain. As part of the project, we are seeking to identify structural changes that are not yet visible so we can assess how our sector can adapt best.
Along with our partners atStratforma , Amadeus has been engaged in a scenario planning initiative in recent months, designed to assess how a changing world could impact global travel. While we see the travel sector recovering quickly, the shape of the industry, post-recovery, remains uncertain. As part of the project, we are seeking to identify structural changes that are not yet visible so we can assess how our sector can adapt best. These include evolving travel behaviors, new market dynamics and business models, disintermediation, as well as potential technological or regulatory changes. We are also seeking to anticipate potential disruptions in the geopolitical landscape and the impact they could have.Wolfgang Krips outlined more about the aspirations behind theprojecthere , discussing the four possible scenarios for the future we have outlined. One thing that is important to emphasize is that the outcomes discussed below are not predictions, but instead possibilities. In the first oftwo subsequent blogs , Thomas Mauriacexploredtwo of these – entitled ‘Don’t Stop Me Now’ and ‘Turbulent Times’. Today, I will further explore ‘In It Together’ and ‘Bloc Party,’ examining what the global economy might look like under each of these scenarios and how this could impact the travel industry. Let’s begin with the former.
In It Together
In this open world, consumption is driven by new and forward-looking values with their foundations cemented in sustainability including bold policies to respond to climate and economic crises.
If the world were to move in this direction – what would it look like? From a political perspective we would see a coordinated policy agenda enacted globally in response to a deteriorating climate and deepening economic crisis. This would begin at a local level but, over time, leaders of corporations, governments and civic sectors would adopt measures to support such goals. In the economic sphere, trends such as “stakeholder capitalism” and “conscious consumption” would drive the adoption of new values, behaviors and relationships between travelers, travel operators and local communities. In terms of technology, we would see the promotion of innovative alternatives to travel, such as the metaverse. Developing technologies will act as an enabler to drive “conscious consumption” and accelerate the trend toward sustainable travel.
Of course, this scenario would prompt change across the travel industry. If the global community were to develop an enhanced sense of solidarity, we would see a renewed focus on sustainability andlocal community-based initiatives. Travel would remain a way to connect people, but we would also see a range of digital alternatives substituting some elements of travel. For example, business travel, internal and less business-critical meetings could be replaced by digital interaction and over time, the metaverse could improve creating a more immersive experience for consumers combining both the digital and physical space.
For the traveler, we might see increasing divergence between those who seek short, local stays (forgoing air travel) and those who remain committed to longer international trips. Transportation and lodging would include a broader range of multi-modal experiences. Different verticals would follow opposite dynamics: while hospitality and experiences would continue to thrive, air transportation volumes could be impacted.
Bloc Party
Under the Bloc Party scenario (a world of competing isolated cultures), we’d experience a less open world but with a high demand for consumption. We would see the global economy fracture into communities that we call “blocs”. In this world, we would see numerous, diverging responses to global technology, environmental and economic challenges. While there would be common rules, norms and tech-enabled standards for smooth travel within the blocs, differences would raise barriers between them. At the same time, economic growth rates would diverge between blocs, potentially heightening geopolitical tensions and eroding trust.
Outcomes will provide challenges rather than opportunities for travelers and for the wider industry. There would be a divergence between intra-bloc travel, which would grow and become standardized, while traveling outside of a domestic bloc would become more complex, declining over time to become a premiumleisure product. Competition would also decrease, with a limited number of bloc champions – including flag-carrier airlines and large hotel chains, dominating each market. This would mean a narrower set of experiences for travelers to choose from. A lack of interoperability across blocs would also limit the scale of business and tech development eventually restricting access to a significant proportion of historical addressable markets.
Shared future
Of the four scenarios developed in this exercise, outlined in this blog and the previous posts, elements of each will likely come to fruition. The key is which of the four will dominate in the future?
Whatever the outcome, Amadeus stands for openness and against fragmentation and complexity. We believe in the vital role of technology to remove friction, open travel and help people move around the world, staying connected to their friends, family, colleagues and beyond. We are working to create a single, unified global travel ecosystem, drawing on an ever-increasing depth and variety of partners to open pathways for all. We are seeking to become the go-to technology provider, making travel greener globally, both through our own actions and the tools we can offer to others. We have also launched a series of investments – across sectors including, air, hospitality, transportation and multi-modality, all with sustainability in mind – as we support the next generation of change makers.
Our ambitions will not change whichever scenario we face as we seek to create a more sustainable, connected travel industry, working for the benefit of the traveler. Innovation can come from anywhere, and Amadeus will facilitate this, harnessing the power of an industry ecosystem that is able to develop, scale and commercialize new developments quickly. We believe that travel is a force for good. In the renewal of travel, we are applying technology to build a more open world enabling all of us to connect with the people and places that matter most.
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